An in-depth look at the leading CBD stocks in the U.S stock market this year. Here’s what you need to know. Looking to invest in a market with long-term potential? CBD is a great opportunity, as it hasn’t yet reached its full potential in the U.S. As more consumers begin to use CBD and the regulatory market shifts, the CBD market will likely continue growing. Globe NewsWire has estimated that the U.S. CBD market will expand The rampant growth of the cannabis industry has sparked investor interest in CBD oil stocks. Consider investing in these stocks to grow your portfolio organically.
Investing in CBD Stocks
Sometimes the best time to invest in a relatively new market is after the initial euphoria evaporates. That could very well be the case with investing in CBD stocks.
CBD is short for cannabidiol, which is a chemical found in the cannabis plant. CBD doesn’t produce a high but has been found to have therapeutic benefits.
The U.S. legalized hemp-derived CBD at the federal level with the 2018 Farm Bill. The mere anticipation of the passage of this legislation stoked investors’ interest in the stocks of companies involved in the CBD industry.
Although federal legalization served as a key milestone, the U.S. Food and Drug Administration (FDA) still hasn’t finalized regulations for CBD food supplements. As a result, the CBD opportunity in the U.S. hasn’t delivered on investors’ lofty ambitions — at least not yet. However, the pressure is mounting for CBD regulations to be eased. Even the U.S. Congress has gotten involved with bill proposals to change the federal regulation of CBD products.
The CBD market could expand in the not-too-distant future with the finalization of regulations. Now could be a great time for investors to check out CBD stocks. Here are five CBD stocks to consider in 2022.
|Canopy Growth (NASDAQ:CGC)||$3 billion||Canadian cannabis producer with U.S. CBD operations.|
|Charlotte’s Web Holdings (OTC:CWBHF)||$172 million||Leading CBD products company.|
|Cresco Labs (OTC:CRLBF)||$2.1 billion||U.S. cannabis operator that markets CBD products.|
|Jazz Pharmaceuticals (NASDAQ:JAZZ)||$8.5 billion||Pharmaceutical company with the first FDA-approved CBD drug.|
|The Valens Company (NASDAQ:VLNCF)||$166 million||Canadian company that provides extraction services used to produce CBD and cannabis derivative products.|
For a while, Canopy Growth ranked as the biggest marijuana stock in the world based on market cap. It remains one of the largest companies in the cannabis industry with top-tier positions in the Canadian medical and recreational marijuana markets and the German medical cannabis market.
Canopy Growth can’t enter the U.S. cannabis market and maintain its listing on a major U.S. stock exchange as long as marijuana is illegal at the federal level. However, the company is already a player in the U.S. hemp-derived CBD market.
In 2019, Canopy Growth teamed up with businesswoman and TV celebrity Martha Stewart to develop CBD products for the U.S. market. The company now has a line of CBD brands with Stewart. It also has other CBD products that include Whisl, the No. 1 CBD-only vape in the U.S. market.
Canopy Growth isn’t profitable yet. However, it does have a large cash stockpile, thanks in large part to investments by beverage giant Constellation Brands (NYSE:STZ), the company’s biggest shareholder.
The CBD opportunity is only a secondary reason to consider this stock. The primary potential catalyst for Canopy Growth is the prospect that U.S. federal cannabis laws will be changed and allow the company to enter the lucrative U.S. cannabis market.
Charlotte’s Web Holdings
If you’re looking for a pure-play CBD stock, Charlotte’s Web could be right up your alley. The company pioneered the hemp CBD industry in 2011, and it still ranks No. 1 based on market share.
Charlotte’s Web markets a wide range of CBD products. From bath and beauty to ingestibles and topicals, the company covers all the bases when it comes to CBD. It even sells CBD products for pets.
The company’s CBD products are available at more than 14,000 retail outlets. About 8,000 healthcare practitioners also distribute Charlotte’s Web’s products, and the company has a strong online presence. More than half of its total revenue stems from direct-to-consumer e-commerce sales.
Charlotte’s Web isn’t resting on its laurels. It plans to launch CBD beverages in the second half of 2022. Market researcher Brightfield Group projects that the CBD beverage market will reach $1.3 billion in 2026, up from $245 million in 2021.
However, Charlotte’s Web’s stock performance over the past couple of years has been disappointing. But the company now has a new CEO with former Bacardi executive Jacques Tortoroli taking the helm in December 2021. The potential for the finalization of regulations regarding CBD dietary supplements could be just what the stock needs to mount a major comeback.
Cresco Labs is a U.S.-based cannabis operator that markets recreational and medical cannabis products in 10 states, all of which rank among the 20 most-populated in the U.S. (and with seven in the top 10).
The company isn’t just a cannabis producer and retailer. Cresco also is the No. 1 U.S. wholesaler of branded cannabis products containing CBD, including its Wonder gummies.
Cresco has achieved tremendous success in recent years. The company’s revenue has grown significantly, both organically and through acquisitions. It’s consistently profitable. Cresco’s solid balance sheet should also enable it to continue expanding into new markets.
Probably the biggest knock against Cresco is that the company can’t list its shares on a major U.S. stock exchange as long as marijuana remains illegal at the federal level. However, this limitation also is a key factor behind the stock’s attractive valuation compared to Canadian pot stocks.
You might be surprised to find a pharmaceutical stock listed among the top CBD stocks to consider. But Jazz Pharmaceuticals has a direct and important connection with CBD. In 2018, the company’s Epidiolex became the first CBD product made from the cannabis plant to win FDA approval.
Jazz actually didn’t own Epidiolex at that time. It acquired GW Pharmaceuticals, which developed the CBD drug to treat epileptic seizures, for $6.7 billion in 2021 .
Epidiolex is still a long way from generating annual sales of $1 billion or more, as some analysts projected after it was first approved in the U.S. However, sales continue to pick up as the drug launches in additional European countries.
Jazz also has other growth drivers in its lineup. Sleep disorder drug Xywav is gaining momentum. Sales are soaring for another sleep disorder drug, Sunosi, as well as blood cancer drug Rylaze and lung cancer drug Zepzelca.
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The Valens Company
One of the important steps in investing in marijuana stocks is to understand the different types of companies. Ancillary businesses that support the industry can sometimes have even more attractive prospects than pure plays. The Valens Company is a good example.
Valens is the largest third-party extraction company serving the Canadian cannabis industry. It uses different methods to extract cannabinoids (including CBD) from cannabis. Valens also markets its own cannabis products, which is part of its strategy to transition into a leading cannabis consumer packaged goods company.
The company’s Green Roads already ranks among the top 10 CBD brands in the U.S. Green Roads products are available in about 7,000 retail locations. Valens hopes to also achieve success in Canada if over-the-counter CBD sales are permitted in the country.
Like most Canadian cannabis-related stocks, Valens hasn’t made investors happy over the past year. However, its shares trade at a more attractive valuation than most U.S. and Canadian cannabis stocks.
Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Constellation Brands, Cresco Labs Inc., and The Valens Company Inc. The Motley Fool recommends Charlotte’s Web and Charlotte’s Web Holdings. The Motley Fool has a disclosure policy.
Top CBD Stocks You Should Invest in Today
Looking to invest in a market with long-term potential? CBD is a great opportunity, as it hasn’t yet reached its full potential in the U.S. As more consumers begin to use CBD and the regulatory market shifts, the CBD market will likely continue growing.
Globe NewsWire has estimated that the U.S. CBD market will expand to $13.39 Billion by 2024, an annual growth rate of over 40%. We’ve detailed four CBD stocks below that show great potential.
Right now, CBD oil cannot be added to dietary supplements, which are regulated by the FDA. However, a bill was just introduced to Congress to legalize CBD in dietary supplements! This bill has bipartisan support, so the chances of it passing are higher.
This is great news for the CBD market! This means that, over time, higher quality CBD products will become more readily available for CBD users, as less reputable companies are weeded out by FDA rules. Right now, many companies do not follow the FDA’s quality control procedures to minimize risks to consumers.
You’ll see both Canadian and U.S. companies on this list, as Canadian marijuana companies have been relegated to selling only hemp in the U.S., which means that publicly traded companies have focused on hemp sales.
How to Choose a CBD Stock
When choosing a CBD company to invest in, look at their financial filings, required for any publicly traded company.
Key CBD Company Financials
Earnings Per Share (EPS)
This is the CBD company’s net earnings or losses per share. Look at trends of EPS of the overall CBD industry at the time to see how the company compares to competitors.
Price to Earnings (P/E) Ratio
The P/E ratio can show you if a company’s stock is undervalued or overvalued. You generally are looking for a stock with a lower P/E ratio, as this indicates the stock is likely undervalued. A higher P/E ratio could indicate either expected upcoming growth or that the stock is overpriced.
Yearly Revenue Growth
If you look at a CBD company’s yearly revenue, you can get a sense of the direction in which the company is headed. CBD companies are pouring money into technology, equipment, and research. Expect to see continued growth in successful companies over the next few years.
Other CBD Stock Factors
Choose Pure Versus Synthetic CBD
We recommend investing in companies that use pure CBD, instead of the synthetic version. The impact of synthetic CBD on the body is still being studied and, until more data is available, we recommend investing in companies that use the natural version.
Companies that offer transparency to consumers are more likely to benefit from the possible upcoming regulatory changes. Look for companies that explain their hemp sourcing and CBD processing practices.
Look at Industry Trends
Over the past quarter many different CBD companies lost revenue, so keep that in mind when looking at a company. Look ahead at what each company is planning; this is also a good way to determine where to invest in the CBD space.
Best CBD Stocks
Canopy Growth (CGC)
Canopy Growth is a Canadian-based mainstream cannabis company that expanded into the CBD market in 2019 by partnering with Martha Stewart. The company has more overall sales than any other cannabis company in the world.
CGC is currently trading at just over $28 per share. The company achieved an impressive 76% revenue growth in 2020. Canopy Growth’s revenue decreased in the past quarter, but due to the recent launch of cosmetics, food, and animal care products, along with celebrity support, Canopy Growth is a good option for an already established brand.
Charlotte’s Web (CWEB)
Charlotte’s Web is a well-known CBD company that focuses on improving lives naturally with high quality CBD products. The company is transparent and offers certificates of analysis on their products. They also offer a wide variety of products.
Charlotte’s Web is currently trading at just over $5 per share. With their growing family of brands, Charlotte’s Web has achieved 28% historical annual growth since 2017. Growth is expected to accelerate, with analysts expecting Charlotte’s Web to grow faster than the rest of the CBD industry.
Pure Harvest Corporate Group Inc. (PHCG)
Based out of Denver, Pure Harvest Corporate Group has different companies that operate in both the traditional cannabis as well as CBD industries. PHCG is a great option if you are looking for a diversified CBD stock. The stock focuses on aggressive acquisition of companies in states with attractive markets for cannabis.
The company expanded into the CBD space by acquiring Prolific Nutrition and changing the name to Pure Harvest Hemp. Pure Harvest Hemp will focus on selling wellness consumer products online.
PHCG is currently trading at $0.67 per share. Although the stock has fluctuated over the past several years, the recent acquisition of Prolific Nutrition and additional investors shows promise for Pure Harvest Corporate Group.
Cronos Group Inc. (CRON)
Cronos Group is based out of Toronto and has a diverse portfolio of companies in the cannabis industry. If you are interested in CBD-infused cosmetic products, Cronos Group recently expanded into three hemp-derived CBD brands, including a skin care brand called Happy Dance—partnering with Kristen Bell.
Since many millennials are adopting CBD into their daily self-care routines, we see a bright future for the CBD side of Cronos Group Inc. holdings. CRON is currently trading at $8.50 per share. The stock has also shown strong year-over-year revenue growth.
If you are looking to not only invest in, but also to try CBD, Joy Organics prides itself in providing premium grade CBD products to our customers. You can rest assured you are only getting safe, high quality CBD, so you know exactly what you are putting into your body.
This North Carolina-based CBD company is one of the largest companies in the industry, with an array of products including tinctures, softgels, and award-winning gummies.
Their 2020 end-of-year reporting showed a 22% increase in net sales year over year—a steady incline in a highly competitive industry.
They’ve made a name for themselves through their vast product line, accessible prices, and athlete partnerships. While their stock prices climbed and fell consistently in their first two years in business, there combination of industry expertise, 2020 growth, and the upcoming industry regulations make this a reliable choice for those hoping to capitalize on this industry’s upcoming boom.
With increasing consumer acceptance of CBD, and the upcoming bill to regulate CBD as a dietary supplement, now is a great time to invest in CBD stocks!
Hannah Smith is Joy Organics Director of Communications. She is driven by her passion for providing clear and accessible wellness and CBD education. In 2015, she received her BA in Media, Culture and the Arts from The King’s College in New York City and before Joy Organics, worked as writer and photographer in the Middle East and North Africa. Her work has been featured on Forbes, Vice, Vox, Denver Post, and the Coloradoan.
Best CBD Oil Stocks
Altria comprises Philip Morris USA, U.S. Smokeless Tobacco, John Middleton, Helix Innovations, and Philip Morris Capital, although the company plans to wind down Philip Morris Capital by the end of 2022. It holds a 10% interest in the world’s largest brewer, Anheuser-Busch InBev. Through its tobacco subsidiaries, Altria holds the leading position in cigarettes and smokeless tobacco in the United States and the number-two spot in machine-made cigars. The company’s Marlboro brand is the leading cigarette brand in the U.S. with a 43% share in 2020. Altria holds strategic investments in JUUL Labs (35% economic interest) and Cronos (42%). They are considered a leader in the cannabis and tobacco industry.
|Day Range – – –||52 Wk Range 41 – 57.05||Open / Close – / –||Float / Outstanding – / 1.8B|
|Vol / Avg. 0.3K / 10.6M||Mkt Cap 81.3B||P/E 46.07||50d Avg. Price 43.93|
|Div / Yield 3.76/8.33%||Payout Ratio 367.35||Total Float –||EPS –|
Jazz Pharmaceuticals ( XNAS: JAZZ )
Jazz Pharmaceuticals is an Ireland-domiciled biopharmaceutical firm focused primarily on treatments for sleeping disorders and indications in neuroscience and hematology-oncology. Jazz’s product portfolio includes its lead drug, Xyrem, for narcolepsy, Sunosi for improving wakefulness in patients with excessive daytime sleepiness, Defitelio for severe veno-occlusive disease after stem cell transplant, Vyxeos for acute myeloid leukemia, and Zepzelca for small cell lung cancer.
|Day Range – – –||52 Wk Range 126.14 – 169.98||Open / Close – / –||Float / Outstanding – / 62.7M|
|Vol / Avg. – / 488.3K||Mkt Cap 9.5B||P/E –||50d Avg. Price 156.18|
|Div / Yield –||Payout Ratio –||Total Float –||EPS –|
Village Farms Intl ( XNAS: VFF )
As one of the largest and longest-operating greenhouse growers in North America, Village Farms International produces and distributes premium cannabis to national growers in the U.S. and Canada.
The cannabis stock has a market cap of $288 million and trades over 1 million shares per day. It has an EPS of $0.04 and a P/E ratio of 128. Village Farms International generated total revenue of $144 million in 2019, making it one of the best stocks under $10.
Village Farm International recently reported its revenue in Q1 2020 and declared that it has had a profitable business for the 5th consecutive quarter. The cannabis company has also announced that it has expanded its credit facility with its existing lender by $59 million.
|Day Range – – –||52 Wk Range 2.44 – 7.22||Open / Close – / –||Float / Outstanding – / 88.6M|
|Vol / Avg. 0K / 680.7K||Mkt Cap 221.4M||P/E –||50d Avg. Price 2.84|
|Div / Yield –||Payout Ratio –||Total Float –||EPS –|
GrowGeneration ( XNAS: GRWG )
GrowGeneration Corp. is a premier supplier of cannabis and cannabis-growing equipment. These products include organic nutrients, drip systems, water pumps, air pumps, LED lights and commercial light systems. It is the largest hydroponic supplier in the U.S., with 31 retail and distribution centers.
The cannabis stock has a market cap of $849 million and has an EPS of $0.02. It has an annual dividend yield of $0.02 per share. GrowGeneration has high liquidity and trades more than 1.7 million shares per day. It generated revenue of $79 million in 2019.
|Day Range – – –||52 Wk Range 3.42 – 14.1||Open / Close – / –||Float / Outstanding – / 60.8M|
|Vol / Avg. – / 1.4M||Mkt Cap 274.2M||P/E –||50d Avg. Price 4.76|
|Div / Yield –||Payout Ratio –||Total Float –||EPS –|
AbbVie ( XNYS: ABBV )
AbbVie is a pharmaceutical company with a strong exposure to immunology and oncology. The company’s top drug, Humira, represents close to half of the company’s current profits. The company was spun off from Abbott in early 2013. The recent acquisition of Allergan adds several new drugs in aesthetics and women’s health.
|Day Range – – –||52 Wk Range 128.26 – 175.91||Open / Close – / –||Float / Outstanding – / 1.8B|
|Vol / Avg. 0.1K / 5.5M||Mkt Cap 248.4B||P/E 19.88||50d Avg. Price 144.55|
|Div / Yield 5.64/4.01%||Payout Ratio 76.66||Total Float –||EPS –|
After the legalization of marijuana in the U.S., many companies are actively engaged in the research, development and distribution of cannabis. Cannabidiol (CBD) is the non-psychoactive substance present within cannabis and its products such as CBD oil has had a major impact on the health and wellness industry.
Take a look at these CBD oil stocks that are generating millions of dollars in revenue this year.
Overview: CBD Oil Stocks
Since ancient times, cannabis has been used as a form of medicine and as a means to induce euphoria. Indian sages have also mentioned the medicinal use of marijuana in Vedic hymns of antiquity.
However, President Richard Nixon banned the cultivation and sale of marijuana in the U.S. as part of his “war on drugs” campaign in 1970. It wasn’t until the Compassionate Use Act of 1996 was passed that California became the first state to legalize marijuana to treat people with severe or chronic diseases. As of 2022, 37 states in the U.S. have legalized the medical use of marijuana and 18 states have legalized the recreational use of marijuana.
According to a recent report by the New Frontier Data, the legal sale of cannabis could reach $30 billion by 2025. Due to such high potential to earn profits, alcohol companies have started to invest big in CBD oil companies.
Constellation Brands Inc. (NYSE: STZ) has invested billions in Canopy Growth Corp. (NYSE: CGC). Molson Coors (NYSE: TAP) invested billions in Hexo (TSX: HEXO). Budweiser (NYSE: BUD) entered a joint venture to develop non-alcoholic CBD drinks with Tilray Inc. (NASDAQ: TLRY).
You can still catch up with the market trend and gain some good earnings by investing in CBD oil stocks today.
Best Online Brokers for CBD Oil Stock
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